I'm the Founder and Managing Partner of Ironfire Capital LLC, which runs a tech-focused hedge fund and angel fund. I did a Ph.D. in Management at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management. You can follow me on Twitter @ericjackson, subscribe to me on Facebook, follow me on Sina Weibo, or Circle me on Google+. My email is: dr.eric.jackson@me.com

Top Ten Reasons Why Large Companies Fail To Keep Their Best Talent

Whether it’s a high-profile tech company like Yahoo!, or a more established conglomerate like GE or Home Depot, large companies have a hard time keeping their best and brightest in house. Recently, GigaOM discussed the troubles at Yahoo! with a flat stock price, vested options for some of their best people, and the apparent free flow of VC dollars luring away some of their best people to do the start-up thing again.

Yet, Yahoo!, GE, Home Depot, and other large established companies have a tremendous advantage in retaining their top talent and don’t. I’ve seen the good and the bad things that large companies do in relation to talent management. Here’s my Top Ten list of what large companies do to lose their top talent :

1. Big Company Bureaucracy. This is probably the #1 reason we hear after the fact from disenchanted employees. However, it’s usually a reason that masks the real reason. No one likes rules that make no sense. But, when top talent is complaining along these lines, it’s usually a sign that they didn’t feel as if they had a say in these rules. They were simply told to follow along and get with the program. No voice in the process and really talented people say “check please.”

2. Failing to Find a Project for the Talent that Ignites Their Passion. Big companies have many moving parts — by definition. Therefore, they usually don’t have people going around to their best and brightest asking them if they’re enjoying their current projects or if they want to work on something new that they’re really interested in which would help the company. HR people are usually too busy keeping up with other things to get into this. The bosses are also usually tapped out on time and this becomes a “nice to have” rather than “must have” conversation. However, unless you see it as a “must have,” say adios to some of your best people. Top talent isn’t driven by money and power, but by the opportunity to be a part of something huge, that will change the world, and for which they are really passionate. Big companies usually never spend the time to figure this out with those people.

3. Poor Annual Performance Reviews. You would be amazed at how many companies do not do a very effective job at annual performance reviews. Or, if they have them, they are rushed through, with a form quickly filled out and sent off to HR, and back to real work. The impression this leaves with the employee is that my boss — and, therefore, the company — isn’t really interested in my long-term future here. If you’re talented enough, why stay? This one leads into #4….

4. No Discussion around Career Development. Here’s a secret for most bosses: most employees don’t know what they’ll be doing in 5 years. In our experience, about less than 5% of people could tell you if you asked. However, everyone wants to have a discussion with you about their future. Most bosses never engage with their employees about where they want to go in their careers — even the top talent. This represents a huge opportunity for you and your organization if you do bring it up. Our best clients have separate annual discussions with their employees — apart from their annual or bi-annual performance review meetings — to discuss succession planning or career development. If your best people know that you think there’s a path for them going forward, they’ll be more likely to hang around.

5. Shifting Whims/Strategic Priorities. I applaud companies trying to build an incubator or “brickhouse” around their talent, by giving them new exciting projects to work on. The challenge for most organizations is not setting up a strategic priority, like establishing an incubator, but sticking with it a year or two from now. Top talent hates to be “jerked around.” If you commit to a project that they will be heading up, you’ve got to give them enough opportunity to deliver what they’ve promised.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

The woes are primarily due to wrong HR handling.Most of the so called HR professionals don’t have any idea about people psychology. It would be better if HR people get trained in psychology/counselling and specifically in TA. It is an established fact thatonly a negligible percentage leave the Organisation for better pay cheque but most of them leave, out of frustration and disillusionment of inept handling by HR.

1) Company-centric Intellectual Property agreements (and bad patent law) which gives the company ownership of all ideas the employee comes up with — even while on vacation and in a completely different domain than the company operates in. I would favor patents being given in the name of the individual inventor, with shop rights for their company should that company decide to build it and notify the employee of such in a timely manner. But if the employee decides to build it in their own time with their own resources, the company should not be allowed to profit from it or sue the employee.

2) Company policy regarding internal transfers which means they “own” you and can put you anywhere, send you anywhere, anytime. Even if you apply for a different position elsewhere in the company, the hiring manager has to get permission from the candidate’s current manager before speaking to the candidate — thus squashing internal transfers.

3) Company policy that all applications/resumes be computer vetted against a list of unpublished buzz words before a human ever sees them. Thus, if you used a synonym, abbreviation (or spelled-out word where they wanted an abbreviation), or a different way of saying something — or had used a different tool to accomplish the same task — your resume is never seen by a live person and you don’t ever hear anything back. Black hole. Doesn’t matter if you would have been by far the most qualified person for the job.

4) Online application process so broken that the department managers regularly circumvent it entirely by circulating secret lists of positions. However, this works only in placing people programs are trying to get rid of — not unhappy but talented employees trying to transfer (but whose bosses want to keep them).

5) Incompetent Jekyll&Hyde boss who yells not only if you don’t do exactly what he said, but also if you did exactly what he said but didn’t tell the future and read his mind to know that he would change his mind at some time in the future and expect you to just “know” that. Other times, he submits you for awards. Never know which version I’m going to get.

6) Incompetent managers who are threatened by more competent employees and lie about them to “keep them in their place” and ruin their reputations to make it difficult for them to transfer (so they can continue benefitting from their competence), while protecting their own jobs.

7) Corporate moral sell-out. Short-sighted focus by upper management on maximizing their own personal bonus at any expense. Upper management at my beloved American defense company has decided to sell sensitive technologies to hostile countries — and lobbied the government for years until the current Democratic administration approved it!!! I don’t know who those traitors think will work those programs; I’ll quit on the spot if they try to assign me to one of them!! I’ll likely quit anyway, just to make staffing those treasonous programs that much harder.

Love the points that were made. It needs to be talked about more that what make people amazing is the human traits that cannot and should not be ignored. Impementing training for this should be standard operating procedure.

I’m really impressed to see these top 10 reasons. I’ve worked for AutoZone and O’Reilly Auto Parts, both great companies and too large to see their own self destruction. I’ve said for years that reason #1 is going to be the death of all large American companies. Upper management always want to tell the workers in the stores how to do things in a community they’ve never even seen. When the worker has lived there thier whole life and usually know the best time to operate and service the public. Unfortunately, this arcticle will go ignored by ALL upper management because of thier “I know everything” attitude. Someday the privately owned local businesses will rule again, but certainly not before another great depression kills the corporations.

It’s interesting about large companies and as you say with the resources still not keeping talent. It is true for the medium and small as well. We have heard and seen that people leave managers, mostly their immediate but also one level above. We are talking about the human aspect of talent, worth, development, and as you mentioned igniting the passion or engagement from employees. Companies seem to pass by this probably because it is only beginning to be quantified.

It should be about finding the solution, trying new innovative ways, but mostly about tapping into the human factor.

I would venture to say that many companies do not hire or push “people managers”. Many managers are individual contributors with poor management skills, they usually have a primary job that comes before their manager job and pay little to no attention to the human capital. Many become managers only because it is the next step in the career ladder, not because they are passionate about people. HR has been relegated to hire and fire… Therefore all of the reasons mentioned above are directly related to this !

Terrific article! Specifically, we always have said people leave people not the company. As an Executive Recruiter, we hear all the reasons for why top talent leaves. We seldom hear that compensation/benefits is the driving factor even in this period of wage freezes. Top talent wants to know that someone has a vested interest in them – professionally and personally. The top people are not looking for someone to “take care” of them. Rather, the top people want someone who will understand what their goals are ( or help them define them – mentor), challenge , hold them accountable and demonstrate sincere interest in their success.

How about separate career paths for different people as a reason people quit?

I retired from one of the nation’s largest companies after a fairly rewarding career (I went to work for another company almost immediately thereafter and continue there to this day. I was lucky enough to gain some marketable skills at my first company).

However, there were two distinct career paths for “campus hires (what we called “company virgins”)” who were recruited directly from universites and “experienced hires.” The latter, regardless of credentials and performance could only rise to a certain level which appeared to be almost cast-in-stone. As a result, once they’d attained that level and could no longer be promoted or given anything like a meaningful raise; their performance ranking inevitable declined. You see, we had to have a reason for their stasis. Often, real accomplishments were either utterly ignored or diminished. Imagine, if the you will the frustration of high-achieving people being in such a position. One example I recall vividly was a young lady who was a top-ranked ChemE from Carnegie-Mellon with a Boston U MBA who found herself in the bottom ranks because we had no other place to put her. She quit in frustration but went on to a very successful career with our main competitor – taking all her “tribal knowledge” or our company with her.

Additonally, once individuals reached a certain age and their rank progression had stopped, again due to the fact there was no place to move them higher – their ranking inevitably deteriorated. After all, there’s only so many CEO positions available. Very few people, therefore stayed much past say, 55-years of age so, all that long-term experience went out the door.

In any event; the message is to use all your personnel to the greatest degree possible and don’t follow a forced ranking system – however successful some companies may be using such a system – because you severely limit your talent pool only to the campus-hired “virgins.” This also results in a closed system inhabited by people with no experience outside their first company.

﻿Many consumers enjoy canines of avian nature.There’s something concerning natural ability to fly which captures your human mind.Birds consists of many different shades, arrayed through nature’s amazing, and sometimes extravagant, plumage.Whether you must provide rooster houses just for non-domestic parrots, or when you provide you with bird cages for the accommodation involving birds on your property, there usually are many tips on how to provide a snug place intended for birds to measure or have a look at.

Different varieties of bird prefer kinds of bird homes.Deciding how much house to place in your current yard make a difference to which variety of bird you attract to all your backyard.You can find books on the subject of birds, not to mention bird real estate.These books can help you understand what exactly certain birds locate with respect to a slumbering place.Most pasttime and hobby stores provide kits in addition to patterns providing those prone to working with their hands to generate their personally own bird houses.Not sole can this be a fun by yourself activity, but it can also provide some hours of home togetherness.

For people who prefer to experience birds in the home, there are many types of bird cages available.When selecting bird dog kennel, it is necessary making sure that your bird are going to have enough home.Many companies manufacture high class bird cages just for pampered gulls.While luxuries cage is not actually necessary, there are things a good bird cage ought to have to allow maximum comfort for ones pet.Perches to be found at a number of heights contained in the cage are necessary, as would be a few multicolored toys.A bell can also add some amusement to your bird.

Creatures are amazing creatures.It’s rather a very enjoyment experience to observe them, and play along with them.Bird houses in your backyard may well attract many different species for you to right outdoor your window, and you can make your feathered pet easier in an outdoor bird kennel.